The opportunity in brand communities and customer relationship marketing
In recent years, customer retention hasn’t had the profile of social media marketing despite their close connection but customer relationship marketing is something we at Dialogue explore in our new report, The Power of Brand Communities
But in coming years, expect customer relationships and retention to move further up the marketing agenda as squeezed budgets and the changing algorithms of Google, Facebook et al make customer acquisition an increasing challenge because of automation, data analysis and budgets.
How we treat existing customers to nurture repeat sales and word of mouth is key therefore: increasing retention by just 5% can boost profits by up to 90%, according to a survey by Invesp.
However, social media and email marketing’s ability to cut through in our fragmented media landscape is increasingly questionable, which should lead marketers to explore the real value posed by brand communities.
And what do we mean by brand community? A brand community is a group of people who have developed an emotional attachment of affinity towards a brand after purchasing their products or engaging with their services in some way. The community reflects a shared sense of purpose, passion and values, inspiring them to seek connections beyond interactions on social media.
And relevant content is of importance, of course.
Brand communities are nothing new – but something only a few brands have been able to master. These brands are passion-driven or sit in the membership space – it’s something we at Dialogue have long been involved in due to our relationship with Harley-Davidson and its membership organisation, HOG (Harley Owners’ Group).
But there are a number of other brands also famed for developing and nurturing a fan base: Patagonia does so through its Patagonia Action Works connecting people with ways to save the planet, Adidas through gamifying the whole customer and brand advocate experience; while Sephora has given its most ardent customers an open line of communication to its experts and fellow shoppers around makeup.
These unique communities share four key characteristics; membership; a two-way influence model, integration and fulfilment of needs or shared goals. All these communities may have fundamentally existed because of a financial transaction but their goals are much bigger than that. They tap into a specific agenda all their members can connect with.
Says Benji Vaughan, founder and CEO of community app, Disciple, ‘Community is not a marketing function and most communities wither when bombarded with marketing content.’
The power of having a brand audiences can get involved with is key, therefore – and excitingly for brands, our research showed that the biggest opportunity exists with those digital natives, Generation Z.
This shouldn’t be much of a surprise as they have grown up with the internet and social media is a natural part of their daily lives: 50% of this demographic said they were members of at least one brand community.
Naturally, this type of deeper engagement impacts positively on their behaviour. For those connecting with brands in this way, they’re much more likely to discuss these brands or products directly with their friends offline once they’ve seen or received news or information from the brand.
Of those polled, 31% admit to frequently discussing the brand and 57% sometimes discussing the brand. And what’s important to them is early access to price promotions, special offers or sales (31%), experiences and content that helps them understand the brand; 27% cite exclusive content and 22% exclusive experiences.
This is all good news for brands – but some types in particular. This 16-to-24 year old audience favours communities dedicated to fashion (30%), beauty (28%); health and diet (11%); restaurants and bars (11%) and fitness (11%).
Says Simon Jobson, Global Digital and Marketing Director of Aquascutum, ‘Younger consumers are more interactive within communities whereas older consumers are more passive but still want content that is relevant to their consumption patterns and want a relationship with brands who understand them.’
Empowering audiences in this way is still an untapped opportunity for many brands – yet its potential vital in helping circumnavigate many of the issues businesses are struggling with in 2020 when it comes to marketing.
If you’d like to discover more about brand communities, please check out the report in full here.
Dialogue will also be hosting a panel session around content and brand communities at the CMA Summit on 19th March 2020.